Sensex up over 250 pts, Nifty at 8800; banks, IT, FMCG gain

1:45 pm Subsidy share: The Oil Ministry proposed a new subsidy sharing proposal by which upstream companies ONGC and Oil India would not make any contributions towards subsidy burden if crude prices are at or below USD 60 per barrel. The companies, however, take upon 85 percent of the burden if crude ranged between USD 60 and 100 and 90 percent if oil stays above USD 100.

In an interview Sudhir Vasudeva, former chairman and managing director, ONGC says the government should instead fix the price at USD 65 vis-a-vis 60 per barrel.

1:30 pm Downgrades: Shares of KEC International slumped over 12 percent intraday after it posted disappointing December quarter results. Its consolidated total income fell 6.7 percent to Rs 2053 crore while EBITDA was down 26.2 percent at Rs 104.6 crore.

Sales was driven by strong cable sales offset by weaker transmission and distribution (T&D) and railways revenue. The company was expected to report a recovery in Q3 EBITDA margins. However, during the quarter, its net profit was up at Rs 66.4 crore from Rs 19.2 crore year-on-year.

Barclays downgraded the stock to underweight from overweight and lowered target price by 40 percent to Rs 73 from Rs 121 per share. It warns that there is a limited visibility of a margin turnaround post the deterioration in margins from Q2 while exposure to the Middle East and international business is a concern.

1:20 pm Market check: The market has started to rally with boosts from bank, IT and FMCG stocks. The Sensex is up 257.75 points or 0.9 percent at 29140.86 and the Nifty is up 76.85 points or 0.9 percent at 8800.About 1306 shares have advanced, 1342 shares declined, and 243 shares are unchanged.

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It is a good day of consolidation as the Sensex is up 126.33 points at 29009.44. The Nifty is up 36.75 points at 8760.45. About 1273 shares have advanced, 1342 shares declined, and 230 shares are unchanged.

Wipro is up 3 percent while HDFC, Axis Bank, Infosys and Coal India are top gainers in the Sensex. Metals & oil stocks drag. Among the losers are Tata Power, ONGC, Sesa Sterlite, M&M and Hindalco.

Oil markets edged lower after big losses in the previous session as record high oil inventories in the United States had cut short a four-day rally.Prices had gained in early trade on optimism that steps by China's central bank to pour fresh liquidity into the world's second-biggest economy by lowering banks' reserve requirements would spur demand for energy.

Oil markets remain highly volatile, with US crude losing 9 percent on Wednesday in one of its biggest routs ever. In the previous four sessions, prices had rallied almost 19 percent from their lowest in nearly six years.